Parenting Blog

3 Things You Should Do Before Saving For College

This post is sponsored by Lexington Law Firm.

Thanks to the creation of 529 College Savings Plans in the Small Business Job Protection Act of 1996, American parents have unwittingly been entered into yet another rat race. Not only are we climbing ladders to get the ‘best’ jobs and own the biggest HDTVs, we are also struggling to save the most money possible for college.

Over the past two decades many of us have taken to believing the lie that we are not fully competent moms and dads unless we have saved enough money to gift our children a free ride to the university of their choosing.

That is sheer and utter madness.

Not only is a free ride to college on the backs of 18 years of parental sacrifice not a birthright, there are better ways to utilize your hard earned discretionary income during the prime of your working life. Sometimes the best college saving plan is not saving for college until you do these three things first.

3 things you should do before saving for college

Here are three ways you should be using your money before saving for your kid’s college education.

The 3 Things You Should Do Before Saving For College

Pay off your own college debt before saving for college

Thanks to crippling interest rates that weigh on you like a fur coat in the dead of summer, taking care of your own debt is far more important to your current financial and mental health than savings money for your child’s college costs. It is understandable to have the gut reaction of wanting to help prevent your children from suffering the same financial nightmare you are still struggling to clean up, but you need to take a lesson from the flight attendant handbook on how to use oxygen masks in case of a loss of cabin pressure: please take care of yourself before assisting others. Plus, if your kiddo starts at a local community college to bang out their 100 and 200 level classes for a year to two, and works a job PT all the while, they will not incur the volume of college debt you did and their degree will still bear the name of the school of their dreams.

In short, you will be of far better use to your children if you are free from debt, have reestablished good credit, and if you…

Save for your own retirement before saving for college

The last thing you should want is to be a burden on your children as you age out of gainful employment; you also really want to be able to financially age out of the workplace at some point! It is vital then that you save money to use during your retirement years. Getting started is easy and it is never too late. If your employer offers a retirement savings plan, begin there by contributing a percentage of your paycheck that will maximize any employer’s matching contribution that may be offered to you. For example, if your employer matches 100% up to 4% of your pay, choose to contribute 4% of your pay! Simple as that! This will help your retirement savings grow more rapidly (in the example above, 8% of your pay will be set aside every single paycheck — 4% from you, 4% from your employer!)

Next, set your payroll deduction percentage to increase automatically by 1% every year so that you don’t think about or miss the extra money, and so that your nest egg will get larger as you inch closer to the days of incredible empty nest travel. The best college savings tip is to save for your own retirement first!

3 things you should do before saving for college

Invest in childhood before saving for college

A better way to use any extra income you have now, better than saving for kids college in a 529 college savings plan, is to fight against the marketing campaigns convincing you that you must provide a free college degree to your child and remember instead that you are raising a person not a future college student. By investing in childhood when your kid is 4, 7, 10, 14 and so on, you will be helping do two very important things: helping your child learn new ideas, figure out what they love, and come to understand some of what the world has to offer, all while they are at the most impressionable age(s). You will also be investing in the most magnificent time of life — childhood — the one time period that cannot be replicated and in doing so, scoring major bonding experiences that you simply cannot put a price tag on!

College isn’t going anywhere but childhood is fleeting. Spend your money accordingly.

3 things you should do before saving for college

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